EXHIBIT 99.3
June 4, 1998
EXCHANGE AGENT AGREEMENT
State Street Bank and Trust Company
Corporate Trust Department
225 Asylum Street, 23rd Floor
Hartford, CT 06103
Attention: Kathy Larimore
Assistant Vice President
Dear Ms. Larimore:
ATC Group Services Inc., a Delaware corporation (the "Company"),
proposes to make an offer (the "Exchange Offer") to exchange up to $100,000,000
aggregate principal amount of its 12% Senior Subordinated Notes due 2008 (the
"Exchange Notes"), for a like principal amount of its outstanding 12% Senior
Subordinated Notes due 2008 (the "Private Notes"). The terms and conditions of
the Exchange Offer are set forth in a prospectus (the "Prospectus") included in
the Company's registration statement on Form S-4 (File No. 333-48853), as
amended (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "SEC"), proposed to be distributed to all record holders of the
Private Notes. The Private Notes and the Exchange Notes are collectively
referred to herein as the "Notes." Capitalized terms used herein and not
defined shall have the respective meanings ascribed to them in the Prospectus.
The Company hereby appoints State Street Bank and Trust Company to act
as exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to State Street Bank and Trust
Company.
The Exchange Offer is expected to be commenced by the Company on or
about June 10, 1998. The Letter of Transmittal accompanying the Prospectus is
to be used by the holders of the Private Notes to accept the Exchange Offer and
contains instructions with respect to the delivery of certificates for Private
Notes tendered.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
July 8, 1998, or on such later date or time to which the Company may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Company expressly reserves the right to extend the
Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Company expressly reserves the right, in its sole discretion, to
amend or terminate the Exchange Offer, and not to accept for exchange any
Private Notes not theretofore accepted for exchange. The Company will give oral
(confirmed in writing) or written notice of any amendment, termination or
nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer," in the Letter of Transmittal accompanying the Prospectus or as
specifically set forth herein; provided, however, that in no way will your
-------- -------
general duty to act in good faith and without gross negligence or willful
misconduct be limited by the foregoing.
2. You will establish an account with respect to the Private Notes at
The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes
of the Exchange Offer within two business days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of the Private Notes by causing
the Book-Entry Transfer Facility to transfer such Private Notes into your
account in accordance with the Book-Entry Transfer Facility's procedures for
such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Private Notes (and confirmation of book-entry transfers of
Private Notes into your account at the Book-Entry Transfer Facility) and any
other documents delivered or mailed to you by or for holders of the Private
Notes, to ascertain whether: (i) the Letters
2
of Transmittal, certificates and any such other documents are duly executed and
properly completed in accordance with instructions set forth therein and that
such book-entry confirmations are in due and proper form and contain the
information required to be set forth therein, and (ii) the Private Notes have
otherwise been properly tendered. In each case where the Letter of Transmittal
or any other document has been improperly completed or executed, or where book-
entry confirmations are not in due and proper form or omit certain information,
or any of the certificates for Private Notes are not in proper form for transfer
or some other irregularity in connection with the acceptance of the Exchange
Offer exists, you will endeavor to inform the presenters of the need for
fulfillment of all requirements and to take any other action as may be necessary
or advisable to cause such irregularity to be corrected.
4. With the approval of the President, the Chief Operating Officer,
Executive Officer or any Senior Vice President (such approval, if given orally,
to be confirmed in writing) or any other person designated by such an officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Private Notes pursuant to the Exchange Offer.
5. Tenders of Private Notes may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer--Procedures for Tendering", and Private Notes shall be considered
properly tendered to you only when tendered in accordance with the procedures
set forth therein. Notwithstanding the provisions of this paragraph 5, Private
Notes which the President, the Chief Operating Officer or any Senior Vice
President or any other officer of the Company designated by any such person
shall approve as having been properly tendered shall be considered to be
properly tendered (such approval, if given orally, shall be confirmed in
writing).
6. You shall advise the Company with respect to any Private Notes
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Private Notes.
7. You shall accept tenders:
(a) in cases where the Private Notes are registered in two or
more names only if signed by all named holders;
3
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Private Notes
provided that customary transfer requirements, including those regarding any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Private Notes when so indicated
and as permitted in the Letter of Transmittal and deliver certificates for
Private Notes to the transfer agent for split-up and return any untendered
Private Notes to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of the conditions to the Exchange
Offer, the Company will notify you (such notice if given orally, to be confirmed
in writing) of its acceptance, promptly after the Expiration Date, of all
Private Notes properly tendered and you, on behalf of the Company, will exchange
such Private Notes for Exchange Notes and cause such Private Notes to be
canceled. Delivery of Exchange Notes will be made on behalf of the Company by
you at the rate of $1,000 principal amount of Exchange Notes for each $1,000
principal amount of the Private Notes tendered promptly after notice (such
notice if given orally, to be confirmed in writing) of acceptance of said
Private Notes by the Company; provided, however, that in all cases, Private
-------- -------
Notes tendered pursuant to the Exchange Offer will be exchanged only after
timely receipt by you of certificates for such Private Notes (or confirmation of
book-entry transfer into your account at the Book-Entry Transfer Facility), a
properly completed and, except as described in the section of the prospectus
captioned "The Exchange Offer--Procedures for Tendering", duly executed Letter
of Transmittal (or facsimile thereof) with any required signature guarantees and
any other required documents. Unless otherwise instructed by the Company, you
shall issue Exchange Notes only in denominations of $1,000 or any integral
multiple thereof.
9. Tenders, pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and Letter of
4
Transmittal, Private Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time on or prior to the Expiration Date in accordance with the
terms of the Exchange Offer.
10. The Company shall not be required to exchange any Private Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Private Notes tendered
shall be given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Private Notes tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus or
otherwise, you shall as soon as practicable after the expiration or termination
of the Exchange Offer return those certificates for unaccepted Private Notes (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them (or effected such book-entry
transfer).
12. All certificates for reissued Private Notes, unaccepted Private
Notes or for Exchange Notes (other than those effected by book-entry transfer)
shall be forwarded by (a) first-class certified mail, return receipt requested,
under a blanket surety bond obtained by you protecting you and the Company from
loss or liability arising out of the nonreceipt or nondelivery of such
certificates or (b) by registered mail insured by you separately for the
replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or other solicitation fees to any broker, dealer, commercial bank,
trust company or other nominee or to engage or use any person to solicit
tenders.
14. As Exchange Agent hereunder, you:
(a) shall have no duties or obligations other than those specifically
set forth in the Prospectus, the Letter of Transmittal or herein or as may be
subsequently agreed to in writing by you and the Company;
5
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates for the Private Notes deposited with you pursuant to the
Exchange Offer, and will not be required to and will make no representation as
to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth and
accuracy of any information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a proper person
or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any officer of the company;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities, and the written opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the written opinion of such counsel; and
(h) shall not advise any person tendering Private Notes pursuant to
the Exchange Offer as to whether to tender or refrain from tendering all or any
portion of Private Notes or as to the market value, decline or appreciation in
market value of any Private Notes that may or not occur as a result of the
Exchange Offer or as to the market value of the Exchange Notes;
6
provided, however, that in no way will your general duty to act in good faith
and without gross negligence or willful misconduct be limited by the foregoing.
15. You shall take such action as may from time to time be requested
by the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
--------
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Nicholas J. Malino of the Company
(telephone number (212) 353-8280, facsimile number (212) 598-4283) and such
other person or persons as the Company may request, daily (and more frequently
during the week immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the aggregate
principal amount of Private Notes which have been duly tendered pursuant to the
Exchange Offer and the items received by you pursuant to the Exchange Offer and
this Agreement, separately reporting and giving cumulative totals as to items
properly received and items improperly received. In addition, you will also
inform, and cooperate in making available to, the Company or any such other
person or persons upon oral request made from time to time prior to the
Expiration Date of such other information as it or he or she reasonably
requests. Such cooperation shall include, without limitation, the granting by
you to the Company and such person as the Company may request of access to those
persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date the Company shall have
received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted, the aggregate principal amount of Private Notes tendered,
the aggregate principal amount of Private Notes accepted and the identity of any
Participating Broker-Dealers and the aggregate
7
principal amount of Exchange Notes delivered to each, and deliver said list to
the Company.
17. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery received by you shall be preserved by you for a period of
time at least equal to the period of time you preserve other records pertaining
to the transfer of securities, or one year, whichever is longer, and thereafter
shall be delivered by you to the Company. You shall dispose of unused Letters
of Transmittal and other surplus materials as instructed by the Company.
18. You hereby expressly waive any lien, encumbrance or right of
setoff whatsoever that you may have with respect to funds deposited with you for
the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed by you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter
of Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement;
21. The Company covenants and agrees to indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any loss,
liability, cost or expense, including reasonable attorneys' fees and expenses
arising out of or in connection with any act, omission, delay or refusal made by
you in reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Private Notes reasonably believed by you in good faith
to be authorized, and in delaying or refusing in good
8
faith to accept any tenders or effect any transfer of Private Notes; provided,
--------
however, that anything in this Agreement to the contrary notwithstanding, the
- -------
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your gross negligence or
willful misconduct. In no case shall the Company be liable under this indemnity
with respect to any claim against you unless the Company shall be notified by
you, by letter or cable or by facsimile which is confirmed by letter, of the
written assertion of a claim against you or of any other action commenced
against you, promptly after you shall have received any such written assertion
or notice of commencement of action. The Company shall be entitled to
participate, at its own expense, in the defense of any such claim or other
action, and, if the Company so elects, the Company may assume the defense of any
pending or threatened action against you in respect of which indemnification may
be sought hereunder, in which case the Company shall not thereafter be
responsible for the subsequently-incurred fees and disbursements of legal
counsel for you under this paragraph so long as the Company shall retain counsel
reasonably to you to defend such suit; provided, that the Company shall not be
entitled to assume the defense of any such action if the named parties to such
action include both you and the Company and representation of both parties by
the same legal counsel would, in the written opinion of your counsel, be
inappropriate due to actual or potential conflicting interests between you and
the Company. You understand and agree that the Company shall not be liable under
this paragraph for the fees and expenses of more than one legal counsel for you.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are required, in certain
instances, to deduct thirty-one percent (31%) with respect to interest paid on
the Exchange Notes and proceeds from the sale, exchange, redemption or
retirement of the Exchange Notes from holders who have not supplied their
correct Taxpayer Identification Number or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations.
9
23. You shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Private Notes and, upon receipt of a
written approval from the Company, shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Private Notes, your check in the amount of
all transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of
Private Notes; provided, however, that you shall reimburse the Company for
-------- -------
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles;
25. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and their respective successors and assigns.
Nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement. Without limitation of the foregoing, the
parties hereto expressly agree that no holder of Private Notes or Exchange Notes
shall have any right, benefit or remedy of any nature whatsoever under, or by
reason of, this Agreement.
26. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, and all of which taken together
shall constitute one and the same agreement.
27. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
28. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
10
29. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company, to:
ATC Group Services Inc.
104 East 25th Street
10th Floor
New York, NY 10010
Telephone: (212) 353-8280
Telecopy: (212) 598-4283
Attention: Nicholas J. Malino
Chief Executive Officer
and President
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
Telephone: (212) 408-5100
Telecopy: (212) 541-5369
Attention: Claude S. Serfilippi, Esq.
If to the Exchange Agent, to:
State Street Bank and Trust Company
Corporate Trust Department,
225 Asylum Street
23rd Floor
Hartford, CT 06103
Telephone: (860) 244-1832
Telecopy: (860) 244-1897
Attention: Kathy Larimore
Assistant Vice President
30. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, paragraphs 17, 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver
to the Company any certificates for Notes, funds or property then held by you as
Exchange Agent under this Agreement.
11
31. This Agreement shall be binding and effective as of the date
hereof.
12
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
ATC GROUP SERVICES INC.
By: /s/ Nicholas J. Malino
-------------------------
Name: Nicholas J. Malino
Title: Chief Executive
Officer and President
Accepted as of the date
first above written:
STATE STREET BANK AND TRUST
COMPANY, as Exchange Agent
By: /s/ Kathy A. Larimore
-------------------------------
Name: Kathy A. Larimore
Title: Assistant Vice President
13
Schedule I
Fees $1,500.00
14